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Robert A. Imparato, Jr CFP®
CERTIFIED FINANCIAL PLANNER™ professional
Craig A. Hyldahl CFP®
CERTIFIED FINANCIAL PLANNER™ professional
R.I.C.H. Planning Group, LLC
105 Fieldcrest Avenue, Suite #507
Edison, NJ 08837
Robert: 732-326-5240
Craig: 732-326-5241
Fax: 732-326-5331
Robert: robert@richplanninggroup.com
Craig: craig@richplanninggroup.com
Website: www.richplanninggroup.com
November/December 2025
Is Santa Clause Coming To Town?
History
Yale Hirsch, the founder of the annual Stock Trader's Almanac, coined the "Santa Claus Rally" in 1972 for the likely market performance during the last five trading days of December and the first two trading days of January (12/ to 1/ this year). But the history of the Santa Claus rally dates to the early 1900s. In 1942, author Sidney B. Wachtel presented the analysis in "The Journal of the Business of the University of Chicago." Wachtel used the Dow Jones Industrial Average (DJIA) to study the effect from 1927 to 1942.
While past performance doesn't guarantee future results, the period has posted higher stock prices about 79% of the time since 1950. The S&P 500 index has averaged a 1.3% gain during this time. When stocks decline during this period, significant market downturns have often followed. For example, in 1999, a 4% decline during the Santa Claus rally period was followed by the Dow's 37.8% slide over the next 33 months, and in 2007, a rally period decline preceded the 2008 financial crisis.
Possible Causes
One theory is that greater consumer spending during the holiday season leads to positive retail earnings, giving investors confidence and increasing stock prices. Another factor is the general mood in the market. Investors often feel more optimistic around the holidays, buying more stocks. They rebalance their portfolios and invest year-end bonuses. Trading activity among individual and institutional investors trends lower, leading to lower market volumes and upward price movements, that allow the Santa Claus rally to thrive.Approach with Skepticism
It's smart to be aware of market conditions and focus on long-term investing strategies rather than relying on seasonal trends. Monitor your investments and overall market conditions, and stay in touch with your financial professional about how your investments could behave during this unique time.CONTACT US
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services.
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